What is in for Travel insurance in 2020
Why do we travel? For seeking thrill, joy, tranquillity, knowledge, satisfaction, company, solitude, pleasant or off-beat experiences – there are many answers to this question. None of these might be your reason to set off on a trip, while for some it may be all of these and more. While we can always agree to disagree, there is one thing that can be said with utmost certainty: nobody – without exception – hopes for a vacation punctuated with worries, problems, and unpleasant experiences.
But the truth remains. No amount of meticulous planning that goes into preparing an itinerary can guarantee a trip that is entirely devoid of risks and worries. Sometimes a problem, or many, may arise due to various factors beyond anybody’s control, be it environmental, geopolitical, or even personal. Unforeseen personal issues notwithstanding, challenges may arise simply because of a combination of not-so-prudent decisions and bad luck.
The result? You will most certainly find your travel experience running oblique of your expectations. Thankfully, new-age travel brands are coming up with a vision to ensure that risks, as well as adverse consequences of mishaps, are mitigated significantly if not entirely eliminated. These companies are leveraging innovative strategies to enable tourists to have protective measures in place against potential problems as well as remedial measures to help them overcome those that are unavoidable. The rise of the travel insurance industry falls in line with this shift.
Let’s look at some of the trends that will dominate this space in 2020.
Travel industry to become more organised
True to the spirit of traveling, trip-goers are willing to brave any storm, literal or otherwise, to seek the best experiences on this incredibly rich pale blue dot. This drive is reinforced by various factors that are a product of the modern age, including quick access to a wealth of information, superior awareness beyond one’s geographical comfort zone, seamless transport services, the rise of new-age travel brands, etc.
As a result, the world is increasingly becoming more connected and the travel industry more organised. Naturally, the number of annual tourists – both inbound and outbound – has been steadily rising over the years. This development is being accompanied by a growing demand for travel insurance providers, with the industry climbing at a CAGR of 12%. In 2018, the Indian travel insurance market was worth over $80 million.
Enhanced service delivery
As the fast-paced global changes make the world more unpredictable, it exposes travelers to a variety of concerns. These range from health issues due to extreme weather changes or any other personal reasons and uncertainties bubbling in the dynamic geopolitical landscape, among other things.
New-age brands are, therefore, committed to differentiating themselves by providing modern travelers with the services required to set their minds at ease so that they can focus on experiencing their trip and not on concomitant worries. These range from unforeseen delays and cancellations to asset losses and even fraud. The goal is to enhance the travel experience by making travelers feel safer in unfamiliar location with 24-hour access to all-round support.
Protection measure inventory to expand
In sync with the aforementioned objective, leading players are now facilitating bespoke insurance plans for their consumers besides conventional protection services. The renewed focus on providing travel insurance is expected to deliver a profound impact on the way the modern adventure-seekers engage in travel and tourism. One key benefit is providing consumers with 24-hour access to support agents in unfamiliar locations to boost their safety. This change in service offering and delivery is aligned with the millennial shift that is centered on experiential travel.
The future of travel insurance will see increased and easier access to subscription-based opportunities that will allow companies to offer more flexible travel insurance products tailor-made for each consumer. This future will also be populated with a dynamic range of technology-led, menu-driven travel insurance products along with equally dynamic premiums characterized by hyper-personalisation. What more, companies will add more elements of cover by user-specific bundling of products at virtually no extra cost!
Travel insurance market to grow more sophisticated
To achieve all of this and more, the travel insurance market will need to become even more divided among mainstream providers and niche players in the future. This will enable travel brands to leverage the dynamic synergy as a strategic advantage to stay ahead of their peers while delivering impactful services to their customers. The transforming market will also allow leading travel insurance players to target travelers by picking good risks, such as short holidays, international travel, or age-based demographic.
Such new-age services will not benefit consumers alone. Travel brands will also be able to tap this new market to offer cost-efficient and personalised subscription travel-insurance opportunities while rewarding reward repeat customers and drive loyalty among their customer base. As we enter a new decade, it will be interesting to look at how the travel industry will transform down the line. While the rise of travel insurance certainly comprises a major shift in consumer sensibilities, it also indicates the immense scope for further disruptions to take place in this space in the coming years.
